Is a separately priced plain car wash taxable when it is performed together with a wax treatment?

Plain-English summary

A plain car wash became taxable when it was performed together with a taxable wax job. The Department treated the wash followed immediately by wax as one transaction, regardless of separate prices or the customer's theoretical ability to decline the wash.

A documented plain wash by itself remained exempt because its detergent, water softener, and rinse product did not form a protective coating. The operator owed tax when buying the soaps and detergents consumed in that exempt service. For taxable wax jobs, it could buy waxes and silicones that formed the protective coating tax-free for resale.

What this means for you

Separate menu lines do not necessarily separate a transaction for sales-tax purposes. Florida looked at the operator's normal practice and concluded that washing was an essential part of the combined wash-and-wax service.

Common questions

Q: Was a plain wash alone taxable? No, if the products did not form a protective coating and the operator maintained records distinguishing it from taxable jobs.

Q: Did separate pricing protect the wash portion of a wax package? No. The entire combined charge was taxable.

Q: How were supplies treated? Soap and detergent for exempt plain washes were taxable to the operator; coating waxes and silicones for taxable wax jobs could be purchased for resale.

Citations and references

• Fla. Stat. § 212.05(1)(a)1.a. — retail sales tax
• Fla. Stat. § 212.02(16) — sales price includes services that are part of the sale
• Fla. Admin. Code r. 12A-1.006(16) — car washes and protective coatings
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 99A-059

Original ruling text

SUMMARY

QUESTION: Are charges for a plain carwash taxable when the
charge for the wash is separately priced from the charge
for the wax, and the wash is not a required prerequisite
for the wax job?

ANSWER - Based on Facts Below: The charge for a plain
carwash performed in conjunction with a wax job is taxable
regardless of whether the wash is priced separately from
the charge for the wax, and regardless of whether the wash
is not a required prerequisite for the wax job.

Nov 01, 1999

Re: Sales and Use Tax
Technical Assistance Advisement (99A-059)
Car Washes
Sections: 212.06 and 212.02, F.S.
Rule: 12A-1.006, F.A.C.
XXX (Taxpayer)
F.E.I. # XX

Dear :

This is in response to your letter dated June 28, 1999, for the
Department's issuance of a Technical Assistance Advisement (TAA)
concerning the above referenced party and matter. Your letter
has been carefully examined, and the Department finds it to be
in compliance with the requisite criteria set forth in Chapter
12-11, F.A.C. This response to your request constitutes a TAA
and is issued to you under the authority of Section 213.22, F.S.

ADVISEMENT REQUESTED

You have requested guidance concerning the appropriate sales tax
treatment for car washes and wax jobs provided by the Taxpayer.
Specifically, you question whether a carwash that includes rinse

wax, detergents, or other additives that do not leave a
protective film or coating, is subject to sales tax. You also
question whether a plain carwash purchased at the same time as a
wax job is taxable when the charges for the wash and wax are
separately priced, and the wash is not a required prerequisite
for the wax job.

FACTS

As stated in your request for advisement, the Taxpayer owns and
operates a commercial carwash facility offering the following
three types of packages:

1. A plain wash job in which only detergent or water
   softener is added to the water. "Rinse wax" is also added
   to treat the water so that it beads more easily for
   purposes of removing the water from the car. You state
   that the detergent and/or "rinse wax" may leave a residue
   on the vehicle; however, neither product is intended to be
   incorporated into the vehicle in a significant way. The
   price for the plain wash job is separately stated on the
   Taxpayer's menu/reader board and product sheets given to
   customers, and on the cash register receipts. The price
   for the plain wash job will not change when additional
   products are ordered.

2. A plain wax job in which wax and other substances are
   added that form a protective film or coating on the
   vehicle. The equipment that applies the wax is located in
   the same tunnel as the equipment that provides the wash but
   is separate and distinct equipment and is not activated
   when a plain wash is purchased. A customer may elect to
   clean the vehicle himself prior to purchasing a wax and in
   all cases has the right to refuse the purchase of a plain
   wash job. Since it is not advisable to wax or condition a
   dirty vehicle, a plain wash job precedes the purchase of a
   wax job in nearly every instance.

3. A hand wax or hand-conditioning job in which wax or
   other additives are hand applied to the vehicle.

The pricing of the various wax packages may differ depending
upon how many wax products are ordered, but they are always kept
separate from the charge for the plain wash jobs.

The Taxpayer proposes to treat all washes as exempt from sales
tax, including the wash jobs purchased with a wax job. The
Taxpayer proposes to pay sales tax on the purchase of all
detergents and rinse wax.

The Taxpayer proposes to charge sales tax on each of its wax
jobs and treat the purchase of the materials such as wax,
silicones and the like, which form the protective film or
coating, as exempt. The Taxpayer proposes to extend a resale
certificate to its vendor in lieu of paying tax on these items.

LAW

Section 212.05(1)(a)1.a., F.S., states that tax is due at the
rate of 6 percent of the sales price of each item or article of
tangible personal property sold at retail in this state.
Pursuant to Section 212.02(16), F.S., the term sales price means
the total amount paid for tangible personal property, including
any services that are a part of the sale.

Rule 12A-1.006(16)(a), F.A.C., provides that the charge for a
plain wash job, in which only detergent or water softener is
added to the water, is exempt. The purchase of detergents or
water softeners for use in the performance of the wash job is
taxable to the dealer.

Paragraph (b) of Rule 12A-1.006(16), states that the entire
charge for a wash job, in which wax, silicones, or any other
substance is added that forms a protective coating, is taxable.
The purchase of wax, silicones, and the like, which form a
protective film or coating, is exempt to the dealer. The dealer
shall extend a resale certificate to its supplier in lieu of
paying the tax.

Paragraph (d) of Rule 12A-1.006(16), F.A.C., states that dealers
who operate car wash facilities which provide both taxable and
exempt wash jobs must maintain documentation to distinguish the

taxable status of each transaction. In all instances where a
dealer is unable to differentiate and document the taxable
status of each transaction, it is presumed that all wash jobs
performed at such facility are taxable.

In support of your position that all wash jobs are exempt,since
they are purchased separately from the wax jobs, you cite
Florida Hi-Lift v. Department of Revenue, 571 So. 2d 1364 (Fla.
1st DCA 1991). In Florida Hi-Lift, the court ruled that
transportation charges incidental to a taxable rental of
equipment were not part of the total sales price because the
equipment was delivered F.O.B. lessor's site, and the lessee had
the option of picking up the equipment or having delivery made
by the lessor. You also cite Department of Revenue v. B & L
Concepts, Inc., 612 So.2d 720 (Fla. 5th DCA 1993), in which the
court relied on Florida Hi-Lift in ruling that the delivery
charges and late fees for rented home furnishings were
incidental to the sale and not part of the taxable sales prices
when the charges were separately itemized and applied at the
sole option of the lessee.

The two court cases cited above relate to services and fees
incidental to the rental of tangible personal property.
Although the charge for a plain carwash is an exempt service
transaction when no substances such as wax are added that form a
protective coating, a wash is not incidental to a transaction
involving both a wash and a wax. As you state in your letter, it
is not advisable to wax a dirty vehicle, and in nearly every
instance, a plain wash precedes the purchase of a wax job.

The term "incidental," as defined in American Heritage
Dictionary, Second College Edition, means of a minor, casual, or
subordinate nature. It is usually associated with something
that is more important or essential. For instance, the delivery
of an item rented was considered by the court in B & L Concepts
to be an incidental service. A carwash on the other hand, is an
essential or major element of a transaction involving a wash and
a wax, since it is not practical or advisable to wax a vehicle
prior to it being washed. Therefore, it is our position that
Florida Hi-Lift and B & L Concepts do not apply to services that
are essential to or are a major element of a sale involving

tangible personal property.

Also, we consider the wash and the wax to be one transaction,
regardless of whether the charge for the wash is stated
separately from the wax, and regardless of whether the customer
has an option of not having one or the other. The fact is, it
is the Taxpayer's customary business practice to wash all
vehicles before adding the wax. For example, in the normal
course of business, a customer does not pay for a wash, drive
through the tunnel, and upon exiting the tunnel, pay for a wax
job and drive back through for the wax. Or, in the case of a
hand wax, the customer does not drive off after receiving a
wash, only to return later and receive a wax. The transaction
the customers are paying for is a wash followed immediately by a
wax, whether or not the wax is applied in the tunnel, or in the
case of a hand wax, outside of the tunnel, by the Taxpayer's
personnel.

Additionally, Rule 12A-1.006(16)(b), F.A.C., clearly states that
the entire charge for a wash job, in which wax, silicones, or
any other substance is added that forms a protective coating, is
taxable. Simply because the charge for the wash is separately
priced from the charge for the wax, and because the wash could
possibly be avoided at the option of the consumer, this does not
exempt the charge for the wash. Great weight is given to a rule
that has been in effect over an extended period of time, unless
it is clearly erroneous. State, Department of Commerce,
Division of Labor v. Matthews Corp., 358 So.2d 256 (Fla. 1st DCA
1978), Pan American World Airways, Inc. v. Florida Public
Service Commission, 427 So.2d 716 (Fla. 1983). Also, properly
promulgated rules are presumptively valid. Agrico Chemical Co.
v. Department of Environmental Regulation, 365 So.2d 759 (Fla.
1st DCA 1978).

DEPARTMENT RESPONSE

Since the products used in the plain wash job do not form a
protective coating on the vehicles, and since the Taxpayer
maintains documentation that distinguishes the plain wash job
from other taxable wash or wax jobs, the charge for a plain wash
job is not taxable. The Taxpayer should pay sales tax on all

soaps and detergents consumed in a plain wash job.

Plain wash jobs performed in conjunction with a taxable wax job
are taxable regardless of whether the charge for the plain wash
job is priced separately from the charge for the wax job. For
example, if a customer enters the tunnel and receives both a
plain wash and a wax, the entire charge is taxable. In these
instances, the Taxpayer should purchase the waxes and silicones
that form a protective coating, free of the sales tax, by
extending a Certificate of Resale to its vendor.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S., which is binding on the Department only
under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is
predicated on those facts and the specific situation summarized
above. You are advised that subsequent statutory and
administrative rule changes or that judicial interpretations of
the statutes or rules upon which this advice is based may
subject similar future transactions to a different treatment
than expressed in this response.

You are further advised that this response, your request and
related backup documents are public records under Chapter 119,
F.S., which are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request you provide the undersigned with an
edited copy of your request for Technical Assistance Advisement,
the backup material and this response, deleting names, addresses
and any other details which might lead to identification of the
taxpayer.

Your response should be received by the Department within 15
days of the date of this letter.

Sincerely,

Richard R. Parsons
Tax Law Specialist
Technical Assistance & Dispute Resolution

(850) 922-4838

Control No. 38213